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Representatives, petitioner Rep.

Ridon accused foreign-dominated companies,


Topic e. Regulation of economic activities specifically AXN and FOX, of "encroaching upon protected industries
ii. Organization and regulation of private corporations - Art. including the mass media and the advertising. He said that based on the last
XII, §16 documents submitted to the Securities and Exchange Commission (SEC),
Case No. G.R. No. 210885. August 26, 2014. corporations,. including those abovementioned, have foreign shares which
G.R. No. 210886. August 26, 2014. constitute 99.99 percent of ownership — a clear violation of the Constitution'
Case Name Ridon v. AXN Networks Philippines Inc., [that] . . . these corporations cannot be allowed to engage in mass media by
Full Case JAMES MARK TERRY L. RIDON AND JONAS JULIUS providing programming content to CATV operators or engaging in
Name CAESAR N. AZURA,petitioners, advertising pursuant to the limitation under the 1987 Constitution and other
vs. statutes governing the mass media industry."
AXN NETWORKS PHILIPPINES, INC., SECURITIES On February 7, 2014, Rep. Ridon and Atty. Azura formally brought the issue
AND EXCHANGE COMMISSION, NATIONAL to the attention of the Court through the filing of these consolidated
TELECOMMUNICATIONS COMMISSION, AND petitions. The petitioners believe that the failure of AXN and FOX to fulfill
MOVIE AND TELEVISION REVIEW AND the minimum nationality requirements should have prevented the SEC from
CLASSIFICATION BOARD, respondents. issuing the pertinent certificates of registration for being contrary to the
- Constitution.
JAMES MARK TERRY L. RIDON AND JONAS JULIUS
CAESAR N. AZURA, petitioners, According to the petitioners, AXN and FOX were given by the SEC the
vs. authorization to engage in mass media and advertising despite being 99.99%
FOX INTERNATIONAL CHANNELS PHILIPPINES controlled by aliens. As the pertinent General Information Sheets 12 would
CORPORATION, SECURITIES AND EXCHANGE show, AXN is 99.99 % owned by South Asian Regional Investments, Inc.,an
COMMISSION, NATIONAL TELECOMMUNICATIONS entity organized under the laws of the State of Delaware, U.S.A.;and FOX is
COMMISSION AND MOVIE AND TELEVISION 99.99% owned by Star Television Advertising Ltd.,an entity organized under
REVIEW AND CLASSIFICATION BOARD, respondents the laws of the British Virgin Islands.
Ponente To the petitioners, the authority conferred under the issued AOIs to AXN
Doctrine Section 11, Article XVI of the 1987 Constitution and FOX should not have been given in the first place, as it runs afoul of the
Constitutional proscription on alien domination of mass media and
The 1987 Constitution embodies the policy of Filipinization as a continuing
advertising. In their consolidated Comment, the SEC, the NTC and the
expression of the collective sense of nationalism that sprung in the early
MTRCB, through their counsel, the Office of the Solicitor General (OSG),
days of the Republic. It prohibits and/or limits the participation of aliens in
disagree and pray for the dismissal of the petitions. AXN and FOX, in their
enterprises considered sensitive and vital to both the national economy and
Opposition and Comment/Opposition, similarly pray that the petitions be
national security. Thus, paragraph 1, Section 11 of Article XVI of the
dismissed.
Constitution restricts the ownership and management of mass media to
citizens of the Philippines, or to corporations, cooperatives or associations, ISSUES
wholly-owned and managed by such citizens. Paragraph 2 of the same
article likewise restricts engagement in the advertising industry to Filipino WON in issuing the pertinent certificates of registration, SEC effectively
citizens or corporations or associations with at least seventy per centum of allowed AXN and FOX to engage in mass media and advertising despite
its capital owned by such citizens. being 99.99% controlled by aliens and, thus, violate the foreign ownership
restrictions under Section 11 Article XVI of the 1987 Constitution?
RELEVANT FACTS
No. There being an impropriety in the remedy resorted to by the
In his privilege speech, labelled by the media as the "State of Philippine Cable
petitioners and in the absence of the indispensable minimums for
Television" 8 and delivered on January 27, 2014 before the House of
judicial review, the Court cannot give due course to these petitions. be to order the SEC to withdraw the certificates of registration issued
to AXN and FOX. Because the issuance of the pertinent certificates
(A) Rule on the propriety of the petitioners' direct recourse via Rule 65 –
Section 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess its gave the latter corporate life, the withdrawal or revocation of their
or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty certificates would necessarily mean their corporate death. In other
and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as
law and justice may require. words it is clear that the petitioners basically seek the revocation of
A plain reading of the above shows that certiorari may lie only when a the very existence of AXN and FOX.
tribunal, board, or officer exercises a judicial or quasi-judicial function
- Under Presidential Decree (P.D.) No. 902-A, 31 the authority to
with grave abuse of discretion. Does the SEC function as a judicial
suspend or revoke the franchise or certificate of registration of
body or as a quasi-judicial body when it issues a certificate of
corporations, partnerships or associations upon any of the
registration or grants a franchise? It does not.
grounds provided by law lies with the SEC. Section 6 (i) of this
- The SEC, in issuing certificates of registration in favor of a
decree specifically mandates that the decision must be arrived at
corporation, is not called upon to adjudicate the rights of
after proper notice and hearing. Conducting a hearing is not the
contending parties or to exercise, in any manner, discretion of a
function of this Court, for it is not a trier of facts. On the issue of
judicial nature. What it does is merely to verify the documents
compliance with the nationality requirements, especially for AXN
submitted for incorporation in order to determine if there has
and FOX to defend their threatened corporate life, a hearing
been substantial compliance with the list of requirements of the
must have been availed of at the level of the SEC.
Code. Thus, in the process of incorporation, the SEC is clearly
not acting in any judicial or quasi-judicial capacity. (D) Well-established in this jurisdiction is the rule that corporate existence
cannot be collaterally attacked.
- Constitutional law teaches that the State's authorization for - Section 20 of the Code states that the due incorporation of any
creating a private corporation such as AXN and FOX emanates corporation claiming in good faith to be a corporation under this
from Congress and is expressed through a general law enacted Code, and its right to exercise corporate powers, shall not be
for that specific purpose. That law is the Corporation inquired into collaterally in any private suit to which the
Code (Code), 28 which gives the SEC the power to approve or corporation may be a party. Such inquiry may be made by the
reject the AOI of any corporation in accordance with the Solicitor General in a quo warrant proceeding. In filing these
statutory requirements of the Code. Thus, when the SEC gives petitions, the petitioners are in effect making a collateral attack
the State's consent for a corporate entity to exist through the on the corporate existence of AXN and FOX in the guise of an
approval of the latter's AOI and the subsequent issuance of a action questioning the SEC's issuance of the pertinent certificates
certificate of registration, it is as if Congress itself approves the of registration.
creation of that corporation.
- In the end, the Court would not want to pre-empt the
- The absence of an assailed act derived from the exercise of a prerogative to withdraw or uphold the State's imprimatur on a
quasi-judicial or judicial function removes from the Court the corporate existence by giving due course to these petitions. This
power to decide these petitions by way of certiorari. prerogative rests not on the Court, but on the SEC pursuant to a
congressional delegation under the Corporation Code; it can also
(B) The rule requires that in availing of the remedy of special civil be exercised via a quo warrant proceeding instituted by the
action for certiorari, there must have been neither an appeal nor Solicitor General.
any plain, speedy, and adequate remedy in the ordinary course
of law. Here, the petitioners came directly to this Court without DISPOSITIVE POSITION
exhausting other remedies that could have been plain, speedy
and adequate. WHEREFORE, the petitions are DISMISSED, without prejudice.
(C) The necessary consequence of granting the petitioners' prayer would